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AMWD vs. WSC: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Furniture sector might want to consider either American Woodmark (AMWD - Free Report) or WillScot (WSC - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, American Woodmark has a Zacks Rank of #2 (Buy), while WillScot has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that AMWD is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

AMWD currently has a forward P/E ratio of 12.09, while WSC has a forward P/E of 330.53. We also note that AMWD has a PEG ratio of 1.34. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. WSC currently has a PEG ratio of 22.04.

Another notable valuation metric for AMWD is its P/B ratio of 2.31. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, WSC has a P/B of 2.68.

These are just a few of the metrics contributing to AMWD's Value grade of B and WSC's Value grade of D.

AMWD stands above WSC thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AMWD is the superior value option right now.


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